The loss of an entire NBA season would also mean the loss of an estimated $4.5 million in local revenue.
That’s what Memphis City Council members were told in a committee session Tuesday by Lisa Daniel, managing director of Public Financial Management. PFM is an advisor to the Memphis-Shelby County Sports Authority.
That $4.5 million loss comes primarily from lost seat use fee revenue at FedExForum and a sales tax rebate on NBA-related sales like tickets, concessions and novelties. Both losses, of course, come because games aren’t happening. No one is buying tickets and paying the seat use fee, and fans aren’t lining up on game day to buy concessions and novelty items.
But that lost revenue wouldn’t immediately mean the city or county has to scramble to make up the difference. A “senior surplus fund” would be tapped because of the expected $4.5 million loss, Daniel said.
There’s another reserve fund that currently holds about $23 million. The city and county are pledged to replenish any draw from that fund.
Meanwhile, the entire 2011-2012 NBA season has been thrown into doubt following a rejection by players Monday of what’s been described as the league’s final offer – according to the Wall Street Journal, it was “a proposal to split revenue about 50-50 and start a 72-game season on Dec. 15.”
According to the WSJ, players have begun a move to disband their union, “a legal tactic that would allow the players to bring an antitrust lawsuit against the league.”